Impulse buying
Today, I'm gonna write about burning money. Ah sorry, I mean impulse buying or otherwise known as impulse spending.
So it’s 6 March now and as my fellow Asians know, we’re having another one of those monthly sales on every e-commerce platform ever. Like those 1.1, 2.2 or 12.12 ‘insert number here’ kind of sales. Personally, I like these sales as I get to buy the things I need at a much lower price. But I also find them kinda problematic. I noticed I get so hyped up for these events because of all the advertisements I get on my phone, laptop or everywhere I go, Youtube or Instagram. They’re all talking about the biggest sale happening in the month. And sometimes I feel bad and frustrated that I don’t have anything in my cart like I feel the need to add something to it and check out or else I’m gonna miss out on all these amazing discounts. Like having the feeling of 'FOMO’.
And also even though there's no monthly sale, I find it problematic that when I'm not doing anything, I'm just gonna open the Lazada or Shoppee app and look for something to spend my money on. Even though I don't necessarily need anything at the moment. Everything makes you feel like you need to always be buying something when in reality there's nothing you need to buy at the moment. And that's usually what causes people to impulse buy. All of these apps just curate all the nicest things they know you want to make you feel like you need to buy these things, spend your money on things you don't actually need. So what's my point? Where am I going with this? We need to acknowledge the fact that one of the biggest roadblock when it comes to managing your money is controlling your spending. In the world we live in today, it's hard to not fall into the trap of mindless spending and impulse buying with all of these sites and advertisements shouting at your face that you need to be buying this or that.
So here are my tips to avoid falling into these traps. I’m not an expert and I’m not perfect. I do impulse buy from time to time. But I think that the things I have been doing have helped me with that. So I hope these tips can help you if you have trouble with controlling your spending. I will be covering the following: Mindset shifting and my 3 Part Anti-Impulse buying system.
So firstly, mindset. In my opinion, it is the most important factor as it essential to build the foundation that will guide you in your decision-making process. One of the biggest mindset shifts when it comes to looking at money is viewing money as time. What do I mean by this? Time is a limited resource. Once you spend your time on something, you’ll never get it back. It’s not something that you can magically make more of. Let’s say you have a job that pays $10/h. So 1 hour of your time is worth $10. Now, whenever you’re gonna buy something for let’s say $200, you’re not just spending $200. What you’re doing is to exchange 20 hours of your life for that item. Now it makes you wonder: Is that item worth exchanging 20 hours of my life for? And if yes, I will purchase it. If not, then maybe I’ll reconsider. So whenever I’m about to buy something, I really look back to how hard I had to work to earn that amount of money. How many hours I had to work to earn this much money so I can’t bring myself to carelessly spend money just like that now. I value my time. So what’s my point? I’m not saying shopping is bad. Shopping is fun, you’re free to spend your money however you want. But you really need to make sure that the purchases that you’re doing are intentional. Like you really want to spend that money. What’s bad is impulse buying. I personally have a lot of things that I bought on impulse and now they’re just there collecting dust. Don’t waste your time. Being more intentional with the way you manage or spend your money is doing your future self a favour. Like one of the reasons I’m working towards managing my money is because, in the future, I don’t want to work a job for the rest of my life. I don’t want to be stuck in that 'rat race. Living paycheck to paycheck. Relying on your job just to pay the bills. I value my time and freedom so as much as possible, I’m saving as much money I can, investing as much money as I can. So in the future, I have money to enjoy.
So now, here’s my 3 step system. No impulse buying, more mindful spending. The mindset shift is important but it’s limited. Here is the 3 step system I have to avoid buying things on impulse.
No.1: I have a want list. Something that I find helpful when I feel the urge to buy something is to just stop and breathe. Put that item into a want list. So my want list is just composed of the date I wanted the item, the item, the cost and why I wanted it. Depending on how urgent it is, I'll put a date next to it as to when I will reconsider the decision. Like 1 week, 2 weeks or a month. Usually, I find that a week after, I don't want to buy that item anymore. So success!
No.2: I have a free to spend fund. It’s just a fund that I’m allowed to spend however I want, otherwise known as a sinking fund. I can use this pool of money to buy items on my want list. If I don’t have any more money in my free to spend fund, I am not allowed to spend. It’s really helpful as it helps me section out my finances so I don’t keep draining money from my bank account. Another thing I learnt from having this fund is it challenges me to find new ways to get the money I need. Even though I work a full-time job, I’m still finding ways to earn money so that I can save as early as I can and buy the things I want.
No.3: I have separate accounts for different purposes. Again, it helps to sections out my finance. To avoid impulse buying, you need to increase the friction in how easy it is to spend your money. I have certain accounts where in my mind I have established the idea of 'money only flows into this account' and 'money will never flow out of this account'
So here are my tips. Let me know what you think and thank you for reading!
-Jay
